AP Fact Check: Romney's Deficit Vow Lacks Specifics

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Republican presidential nominee Mitt Romney waves to delegates after speaking at the Republican National Convention in Tampa, Fla., on Thursday, Aug. 30, 2012.

Updated at 5:39 AM CDT on Friday, Aug 31, 2012

Mitt Romney promised he would cut deficits and put America on track to a balanced budget as president, but he left voters to take it on faith that he could deliver. The details behind that pledge, and the painful spending choices involved, are conspicuously lacking in his agenda.

No one would expect a presidential nominee's acceptance speech, a tone-setting introduction of the candidate before a huge TV audience, to march through the nitty-gritty of a budget. Such speeches are meant to soar and generalize. But the specifics don't exist anywhere else and, without them, there's no telling how he could increase military spending, cut taxes, restore over $700 billion to Medicare, meet the government's core obligations — and bring down deficits.

Election 2012: A Look Back

A closer look at some of Romney's claims in his speech Thursday closing the Republican National Convention in Tampa, Fla.:

ROMNEY: "To assure every entrepreneur and every job creator that their investments in America will not vanish as have those in Greece, we will cut the deficit and put America on track to a balanced budget."

Romney, Ryan and The Faces of the GOP

THE FACTS: Romney has promised to cut $500 billion per year from the federal budget by 2016 to bring spending below 20 percent of the U.S. economy, and to balance it entirely by 2020. But he's remarkably vague on how he would do that. He has offered ideas like repealing President Barack Obama's health care law, which is actually projected to save money overall, and cutting smaller areas of government spending such as foreign aid and Amtrak subsidies.

Some of his priorities, such as increasing military spending and reversing $716 billion worth of Obama's cuts to Medicare, would make the job more difficult. Romney has steered clear of proposals to touch Medicare and Social Security in the short run, which leaves a relatively limited portion of the $3.6 trillion federal budget to cut.

He's also proposed to cut tax rates while ending some deductions and exemptions, but he hasn't detailed which ones. Deductions that are hugely expensive for the government to provide — like the mortgage interest and charitable deductions — are also hugely popular.

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ROMNEY: "That business we started with 10 people has now grown into a great American success story."

THE FACTS: Bain Capital is indeed a success story. But the story of the companies it invested in is more complicated. Romney mentioned his usual examples of companies that started or prospered in his career as a venture capitalist — the national Sports Authority and Staples chains, and Steel Dynamics in Indiana.

A new Romney website, devoted to his record at Bain, states "the businesses Romney helped start while at Bain Capital employ more than 100,000 people today." But like the candidate himself, it doesn't subtract job losses during his time at Bain Capital and it doesn't make clear that much growth came years after he left — as did some job losses than Obama blames on his rival.

Georgetown, S.C.,-based GS Industries was one such company that Bain bought in the mid-1990s. In 2001, the steel mill filed for bankruptcy and was tied up in lawsuits from local residents alleging the plant polluted their historic town. Romney blamed the bankruptcy on Chinese dumping cheap steel into the U.S. market, although Bain ultimately realized more than $30 million on its investment, according to financial documents.

At another Bain-owned South Carolina company, the Holson Burnes Group Inc. in Gaffney, about 150 workers lost their jobs as some plant operations were sent up north — and later overseas. By 2004, a prospectus showed Bain saw a $33.8 million valuation on its initial investment.

Steel Dynamics quickly became a leader in the production of flat-rolled steel, expanding to other locations in the U.S. and Mexico, reaping $8 billion in sales in 2011. Bain's five-year investment paid off, and when the Bain cashed out in 1999, it left with an 82 percent rate of return on its $18 million investment.

But the steel mill received $37 million in state and local tax incentives to build in Indiana, and nearby residents were subject to a special income tax levy to support the project. That part of the story does not fit well with the Republican convention's "We built it" mantra that business, not government, grows jobs. Romney acknowledged in the speech that not all Bain investments were successful.

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ROMNEY: "And let me make this very clear — unlike President Obama, I will not raise taxes on the middle class."

THE FACTS: Obama has enacted several laws that could raise taxes for some middle-class families. Other Obama laws, however, have reduced taxes for many more such families.

A 2009 law increased the federal cigarette tax to pay for expanding a health insurance program for low-income children. Also, Obama's massive new health care law imposes fines for not getting health insurance. The Supreme Court called the fines taxes in the ruling that found the law constitutional.

However, Obama's 2009 economic stimulus package included a series of tax cuts for middle- and low-income families. One, the Making Work Pay tax credit, provided millions of working families up to $800 a year in 2009 and 2010.

Obama also signed a temporary reduction in the Social Security payroll tax for 2011 and 2012. The payroll tax cut provides $1,000 a year to a worker making $50,000 in wages.

Romney says he wouldn't raise taxes on anyone. However, his tax plan would let the temporary tax cuts in Obama's stimulus package expire, resulting in higher taxes for some low- and middle-income families.

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ROMNEY: "I have a plan to create 12 million new jobs. It has five steps."

THE FACTS: No one says he can't, but economic forecasters are divided on his ability to deliver. He'd have to nearly double the anemic pace of job growth lately.

That's conceivable in a healthy economy. Moody's Analytics, one financial research operation, expects nearly that many jobs to return over the next four years no matter who occupies the White House, provided there are no further economic bumps. Other analysts have questioned Romney's rosy job promises.

Romney's steps include deficit cuts that he has not spelled out, and a march toward energy independence that past presidents have promised but not delivered. Unlike Obama, he does not support curbs on demand; namely the much higher mileage standards that are coming into effect. Romney proposes boosting supplies, with freer access to development of oil, gas, coal and more. Independent energy analysts say supply and demand both have to be in the equation for energy independence to be achieved.

THE FACTS: The cuts in Obama's health care law hit hospitals, insurance companies and other service providers — not seniors directly. Those cuts are being phased in over several years, and as yet they do not appear to have harmed the program. However, Medicare's Office of the Actuary, a nonpartisan unit responsible for long-range cost estimates, has warned that over time the cuts would bite too deeply, pushing some hospitals and nursing homes into the red.

The health care law also improved some Medicare benefits, for example, providing assistance to seniors with high prescription costs. And it has launched dozens of experiments to improve the quality of care while keeping costs under control.

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ROMNEY: "I will begin my presidency with a jobs tour. President Obama began with an apology tour. America, he said, had dictated to other nations. No, Mr. President, America has freed other nations from dictators."

THE FACTS: The "apology tour" has been a recurring GOP criticism since Obama's first months in office, after visits to Europe, Latin America and the Muslim world. But Obama never apologized or said he was sorry to anyone on those trips.

Obama has said in some world travels that the U.S. acted "contrary to our traditions and ideals" in its treatment of terrorist suspects, that "America has too often been selective in its promotion of democracy," that the U.S. "certainly shares blame" for international economic turmoil and has sometimes shown arrogance toward allies. Obama's statements that America is not beyond reproach in its history usually come balanced with praise, and he is hardly alone among presidents in acknowledging the nation's past imperfections. But these were not apologies, formal or informal.

Most examples that critics cited as apologies show the president was imploring both the United States and its partners to build better relations, after what he argued were years of faulty Bush administration policies with allies and foes alike.

In February, Obama apologized to Afghan President Hamid Karzai for the burning of copies of the Muslim holy book at a U.S. military base.

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ROMNEY: "His trillion dollar cuts to our military will eliminate hundreds of thousands of jobs, and also put our security at greater risk."

THE FACTS: If Republicans and Democrats can't reach a budget agreement by year's end, a series of automatic cuts would be triggered and beginning in 2013 there would be widespread cuts to government programs that would hit the Pentagon especially hard. But these automatic cuts — called a sequester — are the result of a bipartisan agreement that Romney's running mate, House Budget Committee Chairman Paul Ryan of Wisconsin, helped steer through Congress last year. Romney and Ryan have both vowed to insulate the Pentagon from these cuts if elected. And they've both lately been calling them Obama's cuts — even though they're not exclusively Obama's doing.

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ROMNEY: "President Obama promised to slow the rise of the oceans and to heal the planet."

THE FACTS: Really?

Yes, pretty much.

In a June 2008 speech marking his victory in the Democratic primaries, Obama said generations from now, "we will be able to look back and tell our children that ... this was the moment when the rise of the oceans began to slow and our planet began to heal."

Obama backed a climate-change bill that passed the House in 2009. A similar bill died in Senate in 2010. Opinion is mixed whether he worked hard to get it passed.

Editor's Note: An occasional look at claims made in political campaigns and how well they adhere to the facts.